Additional Insurance Information

Beware the low bid 1 – Insurance

Making sure companies have adequate insurance ensures public safety and proper tree restoration

Hiring an uninsured or under-insured tree contractor can turn into a nightmare for municipal arborists and other institutional agencies.  This quick guide will cover some basic items you need to look for and understand about insurance.

Tree service companies are in the Specialty Risk insurance categoryThis is a category of commercial insurance for high-risk industries as there is a shortage of underwriters willing to cover them.  Companies in this category usually pay much higher premiums than similar-sized businesses in other industries in order to secure insurance coverage.

First, be sure to collect a Certificate of Insurance (COI).  In most cases, your municipality is listed on the certificate as “additionally insured.”  Usually this means the municipality and tree service “share” some risk and is considered desirable. If your town does not require additionally insured status, then be sure to ask to be listed as a “certificate holder” at a minimum.  The insurance company endeavors to inform certificate holders if the insurance policy is cancelled or moved to a different company/different policy.  Important: the insurance company is not required to inform you of this, even if you are a certificate holder.

Second, review the insurance coverage. Here are the most important types of insurance and the coverage limit that is considered adequate in most areas, although metropolitan areas may require higher limits.

You can check these on the certificate:

General Liability (GL)  = 1 Million

This covers “day of” accidents and damage resulting from work operations.  It may have some provision for limited errors and omissions coverage.

Commercial Auto = 1 Million

This covers vehicular accidents.

Umbrella = 2 Million

This is coverage that may kick in if coverage limits are exceeded by large claims.

Workers Compensation = 1 Million

This covers injuries to the company’s workers.  If a company does not have Workers Compensation coverage, an injured employee could claim the municipality is responsible.
Some quick points about Workers Compensation insurance:

  • Some companies will be assigned to a “risk pool” and will need to get Workers Compensation coverage from a “state fund.” Sometimes this is due to a poor safety record.
  • All companies in Ohio, Washington, Wyoming, and North Dakota are placed in a risk pool and have to get Workers compensation from a state fund.
  • It is common for Workers Compensation to be listed on a separate Certificate of Insurance (COI).  Ask the company to provide the COI for Workers Compensation as well as the normal COI.

Other coverage types you may want to consider:

Inland Marine coverage is for the company’s equipment, although this does not affect you directly, if the company is a victim of theft or disaster and they don’t have adequate inland marine insurance, they may not be able to fulfil their contractual obligations until the time that the equipment is replaced, if it is replaced.

Errors and Omissions (E&O) policy.  While E&O is desirable for general tree care, it is essential for consulting work.  This insurance typically covers claims resulting from mistakes, especially in reports, that are usually discovered at a later date.  A Tree Hazard Assessment is a good example of consulting work that requires E&O insurance.

Items to be wary of:

  • Fake Certificates of Insurance. 
    If you suspect a fake certificate, the only way to be sure it is legitimate is to call the insurance agent/agency listed on the certificate.
  • Underinsured.  
    If the coverage limits on the certificate are low, this may indicate an underinsured company.  The company may have chosen low coverage voluntarily in order to pay lower premiums or may not have qualified for robust insurance coverage.   
  • Questionable Underwriting companies. 
    Not every insurance underwriter is equal. If you don’t recognize the insurance underwriter listed on the certificate, you should check A.M. Best’s website to find the financial status.  In general, the underwriter should be at least a B++ rated company with a financial size of VIII (8) or better.
  • Expired/Expiring Certificates of Insurance. 
    Insurance certificates have an expiration date.  The insurance company may or may not inform you when insurance expires and is not renewed, even if you are listed as a certificate holder.  It is important to know your contractor’s insurance expiration dates.

Alternatives/Additions to insurance

Due to the complexities of tracking and understanding insurance coverage, many municipalities will require bonding of contractors.  While bonding may provide a good safety net, the best practice is to require bonding as an addition to insurance, not in place of it. Using bonding in place of insurance can have unintentional consequences.  For instance, bonding could give an unethical, underinsured business operating on a cash basis a means to bid on your jobs.

Beware the low bid 2 – Qualified Contractors

Making sure companies are qualified to perform tree care services ensures public safety and proper tree restoration

Hiring a tree contractor who cannot provide quality services or has poorly trained employees can turn into a nightmare for municipal arborists and other institutional agencies.  This quick guide will cover some basic items that indicate a company is qualified and provides professional service.  Checking the affiliations and credentials that a company and its employees hold is a good way to gage the company’s professionalism.

Membership in professional organizations

Look for membership in professional organizations.  There are a number of organizations that help tree care companies and arborists improve their skills, knowledge and service level.  Legally, you may or may not be able to require membership in an organization, but it can always be used to help assess the professionalism of companies.

  • The American Society of Commercial Arborists (ASCA) is the professional society for consulting arborists and provides support for consulting arborists.  If you hire consultants to write reports, such as Tree Hazard Assessments, it is a good idea to require ASCA membership.
  • The International Society of Arboriculture (ISA) is the professional society for individual arborists and is dedicated to advancing the skill and knowledge of arborist.  You can ask that contractors be members of the ISA. 
  • The Tree Care Industry Association (TCIA) is the trade association for tree care companies and as such the actual company (and all its employees) are the members.  It is dedicated to the advancement of commercial arboriculture.   
  • Local Arborist Groups.  There are many local arborist groups and chapters of the ISA that also provide services and training opportunities for arborists, helping to advance their skills, knowledge and professionalism.

Credentials and Training Programs

  • Accreditations
    Accreditation is a credential that requires an organization, such as a company, to undergo and pass an “inspection.”  There is usually a checklist of item that the company must meet before Accreditation is granted.  Some accreditations are rigorous, such as ISO 9000 for manufacturing companies, Police Department and Fire Department Accreditations, Hospital and University Accreditations, and TCIA Tree Care Company Accreditation, since they include on site inspections.  Other accreditations are easier to attain, since they do not include on-site inspections, such as BBB-accreditation and Landscape contractor company accreditation.  
  • Accredited Tree Care Company (ACR) – TCIA.  This credential applies to a whole company and is based on passing a 63-point checklist that is verified by on-site inspections.  The company has on-site inspections at least once every three years, companies with multiple branch offices receive more frequent inspections.  The 63-point inspection includes a requirement to have adequate insurance, one Certified Arborist for every 10 employees, one Certified Treecare Safety Professional for every 50 employees, a company-training program, and many safety, personnel, and regulatory items.  
  • Certifications
    Certifications are a third party assessment of skills and knowledge through a rigorous exam. Here are the most common certification held in the tree care industry:
  • Board Master Certified Arborist (BCMA) – ISA.  This is often considered the highest-level credential for individual arborist knowledge.  Many companies will not have employees with a BCMA but you could ask for an owner or manager to hold a BCMA.
  • Certified Arborist (CA) – ISA.  This is considered the base level credential for professional arborist knowledge.  Most municipalities will require a Certified Arborist be employed by a contractor, although requiring a CA on site may eliminate companies from contention, for example, line clearance and ROW contracting companies rarely employee CA’s as field workers and would have difficulty meeting that requirement. There are also specialties for the CA credential to be aware of.
  • Certified Treecare Safety Professional (CTSP) – TCIA.  This is the only credential for arboriculture safety and is targeted to safety professional knowledge.  Many municipalities and insurance companies require that a company employee a CTSP. 
  • Certified Treeworker (CT) – ISA.  This is a credential for field treeworkers. Municipalities in states with strong CT participation may require that a CT be on-site. You will need to check your local area to see if there is an adequate number of Certified Treeworkers to include it on your bid specs. There are also specialties for the CA credential to be aware of.
  • Qualification (Certificate) programs
    Qualification (Certificate) programs are third party training programs that teach and assess individuals for skills and knowledge.  Qualifications are also designed to be helpful programs that teach skills and prepare applicants for the exam, usually by way of a workshop.
  • Crew Leader Qualification Certificate (CLQ) – TCIA.
    This qualification is designed to help tree care crew leaders learn how to become good leaders, manage a tree care crew, and interact positively with crew members and clients.  It includes initial preparation by remote testing, a one-day workshop, and an exam.
  • Tree Risk Assessment Qualification (TRAQ) – ISA.
    This qualification is designed to improve knowledge about tree risk and teach methods used to perform tree risk assessments.  It includes a multi-day workshop, performance assessments, and an exam.
  • Training Programs (Certificates of Completion)
    There are a number of training programs offered by organizations to help with professional development of companies and arborists.  These usually provide a certificate of completion.  Electrical Hazards Awareness Program (EHAP) provide important training to avoid electrical injuries and fatalities for both line-clearance tree trimmers and other tree workers is an example of one of these.
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